EUR appreciation is unlikely to be sufficient to result in ECB rate cut - Goldman

"Recent Euro appreciation raises the issue of how the ECB may respond to exchange rate strength," Goldman Sachs said in a recent report.

Key takeaways:

• While we have argued that a stronger Euro is the most likely potential trigger for a policy rate cut, at least thus far the magnitude of the appreciation is unlikely to be sufficient to result in an ECB rate cut
• We continue to expect the ECB to indicate in the autumn that its asset purchases will be spread over a longer period than market expectations
• ECB is likely to reiterate its expectation that rate increases will only take place after asset purchases have ended